Biden vetoes Republican effort to overturn socially conscious retirement rule

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Joe Biden issued the first veto of his presidency on Monday, rejecting legislation to overturn a labor department rule related to an investment strategy for Americans’ retirement plans that Republicans have derided as “woke capitalism”.

“The legislation passed by the Congress would put at risk the retirement savings of individuals across the country. They couldn’t take into consideration investments that would be impacted by climate, impacted by overpaying executives,” Biden said in an Oval Office video released by the White House. “And that’s why I decided to veto it.”

Republicans have railed against so-called “ESG” investing, an acronym that stands for “environmental, social and governance”, arguing that it prioritizes allocating money based on liberal political causes, such as efforts to combat climate change and divest from fossil fuels, instead of earning the best returns for retirement accounts.

“In his first veto, Biden just sided with woke Wall Street over workers. Tells you exactly where his priorities lie,” the House speaker, Kevin McCarthy, wrote in response. “Now – despite a bipartisan vote to block his ESG agenda – it’s clear Biden wants Wall Street to use your retirement savings to fund his far-left political causes.”

Their willingness to challenge corporate America, long seen as a reliable Republican ally, is just one front in the right’s “war on wokeness” that they claim has affected schools, companies and government.

The veto underscores Biden’s new, more confrontational relationship with Republicans in Congress after two years of working with Democratic majorities. Now the White House is readying for even more consequential battles in the months ahead over government spending and the nation’s debt limit. House Republicans, in turn, are using their control of the chamber to advance legislation they intend to use against Democrats in next year’s election.

The White House has argued that the legislation would have made it illegal for pension fund managers to consider “risk factors Maga House Republicans don’t like” such as the climate crisis when making investment decisions.

“Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not,” Biden said in a tweet, referring to the far-right Georgia congresswoman who has made opposition to progressive ideas her political brand.

House Republicans advanced the bill after taking control of the chamber this year. And earlier this month, two Democratic senators, Joe Manchin of West Virginia and Jon Tester of Montana, voted with Republicans, sending the measure to Biden’s desk. Tester is running for re-election next year in states Donald Trump won handily.

In a statement, Manchin called it “absolutely infuriating” that Biden had chosen to “put his administration’s progressive agenda above the wellbeing of the American people”. The coal country Democrat said the rule threatened the nation’s economic security as Americans contend with high inflation and Russia’s war in Ukraine upends energy markets.

The veto, which was expected, sends the legislation back to Congress. House Republicans have scheduled a vote on Thursday in an attempt to override the veto, though to succeed would require support from at least two-thirds of each chamber, which appears unlikely.

Biden’s veto effectively preserves the status quo, allowing – but not requiring – retirement fund managers to consider environmental, social and corporate governance factors when making investment decisions. The rule ​reversed restrictions imposed by the Trump administration that ​made it harder for ​​retirement fund managers to consider such factors.

Though ESG is often framed as a socially-conscious way of investing, proponents say weighing a company’s working conditions​, pending lawsuits​ or its environmental record can help uncover more stable and​ crucially, they argue,​ more profitable savings opportunities. ​The popular investment strategy has become a target of conservatives, with several Republican-led state legislatures passing or proposing legislation that would limit or ban their state governments from considering social or environmental impacts when making investment choices.

In a formal statement notifying Congress of his veto, Biden said that the labor department rule allowed “retirement plan fiduciaries to make fully informed investment decisions by considering all relevant factors that might impact a prospective investment”. By refusing to allow these considerations, Biden said, Republicans were “disregarding the principles of free markets and jeopardizing the life savings of working families and retirees”.

In a statement, Chuck Schumer called Biden’s veto “totally appropriate” and that Republicans’ efforts to stop the practice were “counterproductive and un-American”.

“Maga Republicans were ostrich-like in their actions, putting their heads in the sand, denying the realities of the changing world and trying to force American companies to do the same,” the Senate majority leader said. “This veto was the right thing for American companies and families alike.”

Source: US Politics -


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